Rebuilding Your Credit

[savyjo]

I'm new here and fairly new to credit scores as a whole. We are trying to buy a house hopefully within the next 2 months. We are trying to get a USDA loan but my husbands scores are EX 616 and TU 632. We didn't get a EQ score on the report from the lender. We are so close to 640 but I'm trying to find out the best route to raise it quicker.

He has a auto loan that has been on there for 14 months and haven't been late at all. There is another old closed auto loan that was also never late. He doesn't have any cc but we are going to get a secured cc probably capital one. The negative items are 3 medical collections and all 3 are at different collection agencies. They are

Solutia Tas. $1181 reported 04/10

Revenue recovery $533 reported 4/12

Fox collection center $153 reported 07/09

With Fox I'm pretty sure that was a Dr visit for a broken bone when he had insurance. We thought it was paid until we got the report. The other two are from ER visits when he was laid off with no insurance. So to my questions I know that getting a cc and keeping the balance low and paying on time will raise it since he has no revolving credit but how fast can we expect a jump in his score? Also with the collections I keep getting conflicting information. I have been told that getting a pfd is not only hard now compared to a few years ago but with them being relatively low amounts that they won't even consider it. I plan on trying at least but one thing holds me back which nobody has answered elsewhere for me. I was told by my lender to leave them alone and not pay until closing because paying will hurt my score because it will show recen activity. We never talked about pfd though and he isn't answering my email today. If I do contact them and they won't agree will it have any affect on his score as long as we don't pay? Also if I can get a pfd on let's say the biggest amount and have that removed will that still help enough with collections still remaining? Any help is very much appreciated I'm still trying to learn all of this.

[guiness56]

If at all possible, try to work with the OC.  If they still own the debt see if you can pay them and they recall the debt from the CA.  This will remove the collection from the CR.

The newer the collection, the more impact it has on your score.  The older, less impact.

Paying off a collection should never hurt your score.  Also, FICO looks at paid and unpaid collections the same.  The only way to improve the score would be to have them removed.

It's not generally a good idea to try and get credit within 6 months of purchasing a house.  You will have inquiries added to your CR and if you are approved, any new TL will temporarily drop your score.  It will go back up quickly though.

[savyjo]

I don't know who the OC are on these. I know the newest one is the local hospital but come to think of it I think the $533 was a dentist but it was an oral surgeon and I have no clue who. I didn't go and my husband would never remember. Would it show on the report if it was still owned by the OC? It just says acct submitted to collection on all.

[smiths38]

A friend just closed on an FHA loan with BOA and she had 4 medical collections when she applied for the loan.

[beb86]

With the new FHA guidelines the ignore collections totalling under $1000